Correlation Between South Basic and Elcom Technology
Can any of the company-specific risk be diversified away by investing in both South Basic and Elcom Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining South Basic and Elcom Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Basic Chemicals and Elcom Technology Communications, you can compare the effects of market volatilities on South Basic and Elcom Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in South Basic with a short position of Elcom Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Basic and Elcom Technology.
Diversification Opportunities for South Basic and Elcom Technology
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between South and Elcom is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding South Basic Chemicals and Elcom Technology Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elcom Technology Com and South Basic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on South Basic Chemicals are associated (or correlated) with Elcom Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elcom Technology Com has no effect on the direction of South Basic i.e., South Basic and Elcom Technology go up and down completely randomly.
Pair Corralation between South Basic and Elcom Technology
Assuming the 90 days trading horizon South Basic Chemicals is expected to generate 1.84 times more return on investment than Elcom Technology. However, South Basic is 1.84 times more volatile than Elcom Technology Communications. It trades about 0.14 of its potential returns per unit of risk. Elcom Technology Communications is currently generating about 0.01 per unit of risk. If you would invest 4,080,000 in South Basic Chemicals on October 11, 2024 and sell it today you would earn a total of 290,000 from holding South Basic Chemicals or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Basic Chemicals vs. Elcom Technology Communication
Performance |
| Timeline |
| South Basic Chemicals |
| Elcom Technology Com |
South Basic and Elcom Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Basic and Elcom Technology
The main advantage of trading using opposite South Basic and Elcom Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Basic position performs unexpectedly, Elcom Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Elcom Technology will offset losses from the drop in Elcom Technology's long position.| South Basic vs. Tri Viet Management | South Basic vs. An Phat Plastic | South Basic vs. Sao Vang Rubber | South Basic vs. CEO Group JSC |
| Elcom Technology vs. Tien Giang Investment | Elcom Technology vs. Danang Education Investment | Elcom Technology vs. FPT Digital Retail | Elcom Technology vs. HUD1 Investment and |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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